Procurement Reform Bill debated

Last week I participated in a Stage 1 debate on the Procurement Reform Bill in Parliament.

Every year in Scotland, the public sector spends over £9bn on goods and services and the procurement bill seeks to set out the procedure for the award of these contracts.

At stage 1 of a bill, the debate is on the general principles that the bill sets out.  I was happy to support these principles but used my speech to talk about areas where I am convinced the bill can be improved. You can listen to my speech at 1:24:50 into the above video.

The Scottish Government has acknowledged that a successful approach to procurement can support regeneration and economic development in our communities.  The £9bn spent on public contracts helps to support local employment and deliver new services and facilities for communities.

Unfortunately, as the Jimmy Reid Foundation has noted, the current system disproportionately benefits big companies who have the resources and capacity to participate in the tendering process for big contracts.  This is at the expense of small local employers who are not big enough to take on the work.

I am eager to ensure that the bill makes the procurement process more accessible. For example, I am disappointed that there is no mechanism provided to allow large projects to be de-bundled to provide a number of smaller contracts that local companies could bid on.

The proposals for community benefit clauses offer some improvement in this regard but only kick in where a project is worth over £4m.  The procurement process should be about embedding local benefits across the whole system, not just about bolting sweeteners on to large contracts.

The bill has prompted a great deal of discussion among the voluntary sector and, ahead of the debate, MSPs received briefings from a range of groups.  I particularly welcomed the SCVO’s contribution to the debate and was interested in their proposal to differentiate between ‘classic’ procurement (buying things) and ‘service’ procurement (buying services for people).

I highlighted this in the context of care services – an industry characterised by low wages and high staff turnover.  A specific ‘service’ procurement approach could help to improve the conditions of workers and the standards of services that are provided.

Linked to this is the concept of the living wage, calculated at a level above the minimum wage that allows households to avoid poverty.  In the build up to the bill’s development, I have supported calls to look at how the public sector can set a positive example by delivering the living wage to those working on public contracts.  The Scottish Government has cited case law against the inclusion of the living wage but I am urging them to consider alternative views put forwards by Unison among others.

Elsewhere in the bill, I am keen to see provision that would promote environmental standards to help us meet climate change targets.  As a practical example, I spoke about the provision of free school meals and how, through procurement, we should be aiming to promote the use of locally sourced and fair trade produce.

I also spoke about supported employment opportunities and the need to ensure opportunities for disabled workers.  Under European Law, contracts can be reserved for supported businesses.  However, I do not believe that the current regime encourages authorities to be proactive in awarding contracts to supported employment businesses.

On the whole, the debate was a positive one and I hope that the Cabinet Secretary, Nicola Sturgeon, follows up on her promise to consider amendments with an open mind.  I am discussing a variety of issues with colleagues such as blacklisting and the environmental monitoring to ensure that there are amendments submitted for stage 2 and will be monitoring the bill closely as it makes its way through Parliament.